Court orders halt to nuclear waste fees

20 November 2013

A US Court of Appeal has ruled that the Department of Energy (DOE) must stop collecting nuclear waste fees from utilities until it decides how used fuel is to be disposed of.

American utilities and regulators - through the National Association of Regulatory Utility Commissioners (NARUC) and the Nuclear Energy Institute (NEI) - filed a lawsuit in March 2011 against the DOE for continuing to charge for the halted Yucca Mountain project.

"Putting aside the political dispute about the proposed Yucca Mountain facility, nuclear power ratepayers should not be charged for a program the federal government has closed down."

Charles Gray, NARUC

Funding for Yucca Mountain has come from a levy of 0.1 cents per kWh of nuclear power, which currently adds up to about $750 million per year. Nuclear utilities - and therefore their customers - have now paid a total of over $31 billion into the Nuclear Waste Fund.

The government was supposed to use this money to create a permanent nuclear waste disposal site by 1998. Around $7 billion was spent and much progress made, but Yucca was cut off from funding in May 2009 by President Barack Obama and energy secretary Stephen Chu. Spending on Yucca is now set at the absolute minimum level, while the $24 billion balance of the fund remains with the US Treasury earning substantial compound interest of over $1 billion per year. The US nuclear regulator is resuming its review of the application to build the Nevada facility following an August 2013 court ruling that it had acted illegally in abandoning the project, for which it had in hand some $11 million of appropriated funds.

The US Court of Appeals for the DC Circuit has now ordered the energy secretary "to submit to Congress a proposal to change the fee to zero until such time as either the Secretary chooses to comply with the Nuclear Waste Policy Act as it is currently written, or until Congress enacts an alternative waste management plan."

In a written opinion filed by senior judge Lawrence Silberman, the court concluded that the DOE had failed to conduct the necessary assessment of whether the fees were justified. "Until the DOE comes to some conclusion as to how nuclear wastes are to be deposited permanently, it seems quite unfair to force petitioners to pay fees for a hypothetical option, the costs of which might well - the government apparently has no idea - be already covered," the court said.

"Our ruling here does not provide petitioners with any form of compensation, nor does it relieve them of their obligation to ultimately pay the cost of their waste disposal," the statement continued. "When the Secretary is again able to conduct a sufficient assessment, either because the Yucca Mountain project is revived, or because Congress enacts an alternative plan, then payments will resume (assuming that some future determination concludes that further fees are necessary)."

Ruling welcomed

The court's ruling was welcomed by the utilities and regulators, with NARUC executive director Charles Gray saying the decision "is great news for consumers of nuclear power."

He said that nuclear utilities and their consumers "have upheld their end of the deal, but unfortunately all they have to show for their investment is a hole in the Nevada desert." Gray added, "Putting aside the political dispute about the proposed Yucca Mountain facility, nuclear power ratepayers should not be charged for a program the federal government has closed down."

NEI general counsel Ellen Ginsberg said that the court's ruling "reinforces the fundamental principle that the federal government's obligation is to carry out the law, whether or not the responsible agency or even the president agrees with the underlying policy."

"The court's decision should prompt Congress to reform the government's nuclear waste disposal program," she said. "We strongly encourage Congress to establish a new waste management entity, and endow it with the powers and funding necessary to achieve the goals originally established in the Nuclear Waste Policy Act."